Kurzon Llp v. Thomas M. Cooley Law School

In this action, Plaintiff Kurzon LLP ("Kurzon" or "Plaintiff"), a New York law firm, seeks to recover compensatory and punitive damages against Defendants Thomas M. Cooley Law School ("Cooley"), a Michigan law school, and Cooley's President, Don LeDuc ("LeDuc") (collectively, "Defendants") for defamation and prima facie tort, based upon communications made by LeDuc to Cooley students regarding then-pending litigation in Michigan between Cooley and Plaintiffs' predecessor in interest, Kurzon Strauss LLP ("Kurzon Strauss"), and for violating a provision of New York's Civil Rights Law. Defendants move to dismiss Plaintiff's Amended Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(2), 13(a)(1) and 12(b)(6), asserting that the Court cannot exercise personal jurisdiction over the Defendants; that Plaintiff's claims here are barred because they should have been asserted as compulsory counterclaims in the earlier Michigan litigation; and that Kurzon has failed to state a claim upon which relief can be granted.[1] The Court has subject matter jurisdiction of this action under 28 U.S.C.§ 1332. For the following reasons, the Court grants Defendants' motion.

Cooley is a law school with a principal place of business in Lansing, Michigan and without any campus locations, offices, employees or agents in New York State. (See Am. Compl. ¶ 5; Conklin Aff. ¶ 2.) LeDuc is the President and Dean of Cooley and also a resident of Michigan; he lives and works in Michigan, pays taxes in Michigan and votes in Michigan. (See Am. Compl. ¶ 6; LeDuc Aff. ¶ 2.)

In or about June 2011, one of Kurzon Strauss's attorneys, David Anziska ("Anziska") began conducting an investigation into whether Cooley had manipulated postgraduate salary information to attract students. (Am. Compl. at 1-2; Am. Compl. ¶ 13.) On June 8, 2011, as part of his investigation, Anziska posted a statement on "a relatively obscure blog called JD Underground, '" explaining Kurzon Strauss's investigation, calling Cooley one of the "worst offenders" of post-graduation data manipulation, and stating that "there are reports that" Cooley students "are defaulting on loans at an astounding 41 percent." (Id. ¶ 14.) Plaintiffs allege that Kurzon Strauss was not aware of this posting until it was contacted by Cooley and asked to retract Anziska's statement, which it did on June 15, 2011, after receiving permission from Cooley's counsel to publish the retraction posting. (Id. ¶¶ 14-17.) Anziska had also posted an advertisement on Craigslist asking that anyone with relevant information for Kurzon Strauss's investigation contact him. (Id. ¶ 18.)

Plaintiff contends that, in response to Anziska's investigation, Cooley sued Kurzon Strauss, Anziska and another one of the law firm's attorneys, Jesse Strauss ("Strauss") in July 2011 in Michigan state court, for defamation, tortious interference with business relations, portraying Cooley in a false light and breach of contract (the "Michigan Action").[3] Also in or about July 2011, Cooley sued four anonymous bloggers for defamation (the "Bloggers Action"), including a former Cooley student whose blog was entitled "The Thomas Cooley Law Scam." See Thomas Cooley Law School v. John Doe et al., No. 11 Civ. 11781(CZ) (Cir. Ct. Ingham County 2011). (See also Am. Compl. ¶ 23.)

On August 8, 2011, Kurzon Strauss sued Cooley on behalf of twelve Cooley alumni in Michigan federal court in a case captioned MacDonald et al. v. Thomas M. Cooley Law School , 11 Civ. 0831 (the "MacDonald action") asserting claims based on fraud, negligent misrepresentation and deceptive business practices in connection with Cooley's post-graduate employment data. (Id.¶ 26.) On July 20, 2012, the court granted Cooley's motion to dismiss the MacDonald action, calling the employment reports issued by Cooley "inconsistent, confusing, and inherently untrustworthy, " and so "vague and incomplete as to be meaningless and... [that they] could not reasonably be relied upon, " but, in dismissing the action, concluding that the claims against Cooley could not go forward because: "as put in the phrase we lawyers learn early in law school - caveat emptor." See MacDonald v. Thomas M. Cooley Law School , 880 F.Supp.2d 785, 799 (W.D. Mich. 2012), aff'd, 724 F.3d 654 (6th Cir. 2013).

Meanwhile, on July 14, 2011, after Cooley had filed the Michigan Action and the Blogger Action, LeDuc posted a private message on Cooley's password-protected intranet, which, Defendants claim, was accessible only to Cooley students and staff, in order to inform them about the two cases. (Am. Compl.¶ 32, Ex. C.) LeDuc wrote: "We believe these particular defendants have crossed the line both legally and ethically, calling us criminals who deceive our students and steal their tuition money, and ascribing to us fraudulent student loan activities and default rates..." (Id.) Kurzon Strauss was not identified by name but was referred to as "a small New York law firm." (Id.) Kurzon contends that LeDuc had authorization from Cooley to circulate this statement and that, in doing so, Defendants intended to achieve the widest distribution possible, in that it was distributed to members of various bars, including that of New York. (Id. ¶¶ 33-35.) Plaintiff further alleges that this statement contained false and defamatory statements about Kurzon Strauss; conflated Kurzon Strauss's actions with those of anonymous internet bloggers; and wrongfully attribute Anziska's postings - which were allegedly made in good faith and had since been retracted - to Kurzon Strauss. (Id. ¶¶ 36-44.)

In this lawsuit, Plaintiff asserts claims against Cooley for defamation and defamation per se (id. ¶¶ 45-60); against both Defendants for violation of New York's Anti-SLAPP law (for prohibiting "strategic lawsuits against public petition or participation" or "SLAPPs"), New York Civil Rights Law Section 70-A et seq. (id. ¶¶ 61-82);[4] and against both Defendants for prima facie tort (id. ¶¶ 83-84).

"The plaintiff bears the burden of establishing that the court has jurisdiction over the defendant when served with a Rule 12(b)(2) motion to dismiss." Whitaker v. Am. Telecasting. Inc. , 261 F.3d 196, 208 (2d Cir. 2001).[5] "A plaintiff may carry this burden by pleading in good faith... legally sufficient allegations of jurisdiction, i.e., by making a prima facie showing of jurisdiction." Id . (internal quotation marks and citation omitted). "In deciding a motion to dismiss for lack of personal jurisdiction, the court has discretion to proceed either upon written submissions or through a full evidentiary hearing on the merits, " but, without a hearing or jurisdictional discovery, "the pleadings and affidavits are construed, and any ambiguity is resolved, in favor of the plaintiff." Taylor Devices, Inc. v. Walbridge Aldinger Co. , 538 F.Supp.2d 560, 575 (W.D.N.Y. 2008) (internal citations omitted); see also Mantello v. Hall , 947 F.Supp. 92, 95 (S.D.N.Y. 1996) ("[b]ecause a motion to dismiss based on lack of personal jurisdiction is inherently a matter requiring the resolution of factual issues outside the pleadings... all pertinent documentation submitted by the parties may be considered in deciding the motion") (internal quotation marks and citation omitted). However, "where [a] defendant rebuts plaintiff['s] unsupported allegations with direct, highly specific, testimonial evidence regarding a fact essential to jurisdiction - and plaintif[f] do[es] not counter that evidence - the allegation may be deemed refuted." Merck & Co., Inc. v. Mediplan Health Consulting, Inc. , 425 F.Supp.2d 402, 420 (S.D.N.Y. 2006).

Kurzon thus has the burden on this pre-discovery motion practice of making a prima facie showing that the Court has personal jurisdiction over Defendants. In determining whether the assertion of personal jurisdiction is appropriate, "[f]irst, [the Court] must determine whether the plaintiff has shown that the defendant is amenable to service of process under the forum state's laws; and second, it must assess whether the court's assertion of jurisdiction under these laws ...

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